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Category Archives: Salary Negotiation

Sometimes it’s necessary to write a salary negotiation letter to clarify your position and ask for higher pay or a raise. It can be scary–especially in a tough economy, but do yourself a favor and make it happen! While we recommend you do as much negotiation as possible in person, over the phone, through a recruiter, or even an HR rep–a letter can be a powerful way to justify your request for more money.

A joint study by George Mason University and Temple University surveyed employees across many jobs and industries. People who chose to negotiate (rather than accepting the company’s first offer) got an average of $5,000 more in annual pay. And that starting salary builds on itself. Let’s give an example. Two people start a job at the same time, both getting offers of $50,000. One accepts the $50,000, and the other negotiates for an extra $5,000, bringing her salary up to $55,000. Now, if they both perform equally well and thus receive the same percentage raises throughout their careers, the one who negotiated the higher starting salary earns $600,000 more over a 40-year career.

That’s right: $600,000.

Now do you see why you MUST know how to negotiate?

Writing Your Salary Negotiation Letter

A well-crafted salary negotiation letter must do two things:

Notify employers of your interest in a negotiating for higher pay and,

Justify why you deserve it.

Note: the letter must also deliver one more critically important message, which we will reveal later in the article.

Choose your situation to get FREE sample salary negotiation letters and your strategy for how to negotiate.

New Job: Two LettersNotifying the employer of your intent to negotiate typically requires a separate letter from the justification because you most likely lack a personal relationship with the hiring manager or HR rep. Formalizing the request is the best way to get the ball rolling. Once the employer has responded (either via an email or a call), you can begin the process of justifying your request. Like the figure above shows, you can make a lot more money by switching jobs and negotiating.

The power of your new job salary justification depends on how strong you will be in the job versus your competition and the strength of their job offer versus their competition.

Your Competition
Outshining your competition already happened because you received the offer, right? When asking for more money than offered, the shine can’t end there. You have to pound it into the employer’s mind that you are so superior to any other candidate that they would come across that you’re worth the extra money you requested.

Their Competition
Employers compete for the best talent. You ARE that talent so they want to hire you. Their offer has to be more than competitive—it has to be superior. If the quality of their offer is inferior to the market, then your justification for higher salary will be perceived as reasonable. Believe it or not, most of the time, employers don’t know how their offers stack up versus their competition.

Promotion: One Step
By initially having a verbal conversation with your manager about increasing your promotion salary, any letter you write would briefly mention your intent to negotiate while spending most of the time on justification.

The best salary negotiation letters leave no doubt that your past results are the best indicators of future performance in your new role. You think that already happened since you received the promotion, right? Not quite. Now you’re asking for more money, which means you must absolutely convince them that you’re worth more than they planned to pay you. If they don’t have that confidence, you won’t get the additional money.

Raise: One StepNegotiating your raise will give your paycheck the extreme increase you want. By initially having a verbal conversation with your manager about a potential raise, any letter you write would briefly mention your intent to negotiate while spending most of the time on justification.

Justification for increasing raise salary hinges on convincing your employer that your past results will ensure superior performance in the future. You think that already happened since you received the raise, right? Not quite. Now you’re asking for more money, which means you must convince them that you’re worth more than they planned to give you.

Credible Threat
The ultimate power in a salary negotiation is walking away. Companies spend thousands of dollars to get people in the seats to interview, or in the case of a raise or promotion, they don’t want to spend money on a replacement. If there’s a credible threat that you’ll walk away from the offer or leave your job, companies tend to negotiate. Here’s the secret no employer wants you to know:

It is cheaper to increase your salary than it is for them to search for new candidates.

Even though the economics are in your favor, subtlety in communicating credible threat is a must. You can’t give an ultimatum to an employer to meet your salary demand. You have to say that you’re willing to walk away from the offer, promotion or raise, without saying it.

The Upside
Fortune favors the bold. Remember, people who negotiate make $500,000 more than those who don’t. I’ve helped thousands of people achieve their dreams through salary negotiation. Let me guide you through your process so you can make more money now and throughout your career.

Can you afford NOT to negotiate?

What to Do Next

Get your customized salary negotiation guide and three (3) salary negotiation letters. Simply click the image below to get started. Only $3.99 could get you thousands of dollars more per year. You deserve it.

It’s performance review time and you want to make more money. You have to have a strategy that fits your situation. First, here’s a REAL case of how knowing ONE piece of information doubled my raise amount. The best part is you can do this for yourself even if you’re early in your career and have never negotiated salary before. And it’s simple. Read on.

Case: Easy Way to DOUBLE Your Raise

When I was offered my first job out of college, I didn’t do any kind of salary negotiation. I actually took a lower paying job because one job had a better quality of life than another I was offered. So I started working at Information Resources, Inc. as a market research consultant with the title Assistant Project Manager. I made $27,000. It was a good job. The company was one of the top two companies in its field. They had a number of opportunities to move forward in terms of promotion and ladder, which was kind of what I was looking for, some experience, some structure, and a path to advancement.

I spent the first year working my tail off, learning as much as I could. I tried to use my background that to try to add value; to do extra projects so that I could stand out to management. And the great thing was, I wasn’t just one of those guys who did extra projects to suck up to management. I was friendly with everybody, especially my peers (we’ll talk about why that comes into play later. I think you can anticipate that). I was a guy who was going out there and saying, “Look, I see opportunities. I want to write them up. I want to do the projects. I want to see if I can help the company succeed.”

Prepare

Know Your Status

In doing so, I got the attention of not only my peers, but of management and I was promoted on an accelerated schedule after about nine months to Associate Project Manager. I knew my status: I was viewed as a top performer.

Know Your Market Value

Now, three months later was my one-year anniversary, and that’s within the hiring cycle. IRI had a delay in when you learn about your salary and when you actually get it. It was only a couple of months, so I had just gotten my new salary kicked in. I got an 8% raise, up to about $29,200. A new class of recruits came in, and I started meeting them and trying to mentor them to tell them the things they can do to get ahead. A number of them came from my alma mater. In getting to know these people we got into conversations about salary—many of which I didn’t initiate. It wasn’t something that was taboo between us. It was just kind of like, “Hey, you know, this is how much I make. How much do you make?”

This was in the New York area. Living on that kind of money, it’s so difficult. So essentially, they told me what they made and they made more money than I did. I was floored. Here I was, a top performer, got promoted and a raise on an accelerated schedule, but the people who had come in fresh and new, had no experience, were getting paid more than I was.

Justify Your Salary Request

Sure, a lot of those things are market driven. But, I had proven myself, and felt that I should make more than the people who came in after me. I talked to my manager: “Listen, I don’t want to start any trouble, but the reality is, I’ve heard that the new recruits make more money than I do.” My manager had no idea. She promised to ask our VP if that was the case. The VP confirmed that those new hires made more than I did. He agreed that wasn’t right and got approved to increase my salary. Now this was something unusual. They didn’t do this for everybody, but because I knew my status as a top performer and knew my market value was higher than what I was paid at that time, I got the special treatment.

The Result

I received an additional 7% raise on top of the initial 8% raise that had kicked in less than a month earlier. Overall, if you do the math, my total salary increase came out to just under 16% in just those three months. Yes, my raise almost DOUBLED. My new salary was $31,200. Remember, at that time, living in the New York area, that little bit of money mattered in my monthly expenses. It mattered to me personally and professionally, but it also mattered to me materially.

Lesson: Knowing peer salaries alone can help in a negotiation

I had set my goal which was to make sure that I was paid fairly based on my experience, my background and the work that I had done as a top performer. I had the data—peer salaries and my salary. Because the new recruits made more than I did, I had a clear justification for the salary raise in one step. Know peer salaries and if you uncover any unjust salary situations, don’t be afraid to talk to your manager. It might just make you a LOT more money.

Check out the coverage of founder David Solomon recently talking about methods to increase your salary in the short and long term.

A method of job seeking that will turn around many job searches comes from David Solomon, the bright founder and CEO of SpringRaise LLC in Los Angeles. Solomon has worked with more than 3,700 clients at all levels. This year he added a service for senior managers to senior executives based on his own experience in traditional jobs. The 24 clients who have used the service have averaged salary increases of $5,800.

Performance Review Time?

Take full advantage of your annual review process. Get your customized step-by-step salary negotiation guide. Don’t just take our word for it. Here’s what our clients are saying:

“As a top performer in my company and with my annual review next week, this guide is going to be a big help.” -Martin

“SpringRaise got me a 12% raise when my company is only giving out 2%-4% salary increases.” -Matthew

People whip themselves into a frenzy trying to figure out how to ask for a raise. What’s just as important, however, is WHEN to ask for one. Here are 21 (yes, 21!) situations you should never forget so you know when to ask for a raise. Each of these situations has led to raises on its own for SpringRaise clients. If you have a combination of these situations, your boss will have virtually no choice but to pay up.

FREE BONUS: Download a checklist of these situations so you can mark which apply to you right now. The Checklist includes 2 BONUS SITUATIONS not found in this post where you must ask for a raise. Print it and pin it on the wall or save it to your career folder for reference.

Some companies don’t publicly recognize successful teams with awards. Team shine, Team raise.

6. Your project saved the company significant money

Always, always quantify the impact of your projects. When the company saves money as a result, sometimes they’re willing to share in the savings. If you don’t KNOW, you don’t ASK. And if you don’t ASK…well, you know the rest….

7. Your boss just got publicly recognized for work that you did

This happens all the time. Guilt can be a powerful motivator for your boss. Ask for the raise with grace and your boss may just be willing to buy your silence.

The Injustice League

8. You’ve had 2 performance cycles without a raise

Unthinkable? Think again. Why companies try to get away with this is unclear, but you don’t have to stand for it. Ask.

9. A peer makes more than you (and you’re better)

If you’re outperforming someone at your level, you should be paid more. It’s simple.

10. A subordinate makes more than you

Do we even need to say anything here?

11. Racial Injustices

While it can be difficult to prove, if there is racial discrimination within your company’s pay policies, shining a light on them can get you more money.

12. Gender Injustices

Similar to racial injustices in terms of difficulty in proving, but there’s usually more data available for gender discrimination than other forms.

13. Sexual Orientation Injustices

As crazy as it sounds, this one is often the most obvious. If you see it and can quantify it, report it and a raise will follow.

14. Religious Injustices

Of the major discrimination types, religious discrimination in pay is hardest to prove because of lack of access to data or a diverse enough employee population to quantify the practice. However, sometimes your manager (or a senior manager) will stupidly say something demonstrating a religious prejudice, especially private companies that profess to be governed based on a certain religion’s values.

Download the checklist (right click + Save as..)

Company Chameleon

15. Salary band for your position shifts/new survey results

Every twelve (or 18) months, a company will get a survey to see how well their salary bands match up against their competitors. If you hear that your job has been surveyed, it’s time to ask for a raise. Guaranteed, the salary pressure will be upward.

16. You survived a company layoff

What? The company just laid off people and you should ask for a raise? That’s right. You’re valued and suddenly there’s more money available. Companies want to retain those who weren’t let go.

17. A peer leaves, isn’t replaced and you pick up the work

Companies don’t like replacing people if they feel they don’t have to. That means more work for you. More work equals more money. Remember, they’re not paying the salary of an entire person who used to do that job. They can afford to bump up your salary a bit for taking over.

18. Your company changes compensation policy on the fly

This is different from salary band adjustments and is MUCH more severe. Sometimes companies will change their compensation policies during the year. For example, imagine you started the year with the policy that if you achieve your goals, you would earn a 25% bonus. During the year, however, the company decides to reduce that 25% bonus payout to 10% (this one could also be in The Injustice League). It happens. What do you do? Immediately ask for a raise. Your raise value will most likely be less than the difference in compensation resulting from the policy change–and others WON’T ask for one. They’ll be too upset at the injustice. Opportunity for you.

The Royal Coffers

19. Your company has its “best year ever”

Don’t you love it when companies announce, “we just had the best year in company history!” and then don’t accompany that announcement with “so everyone gets a raise!”? It’s up to you to ask for one. Obviously, there’s more money flowing in.

20. Your company just got funded – and you were there before

Startups and other firms gaining new investment (this includes IPOs, of course) now have money to spread around. If you were at the company prior to the funding event, it’s time to ask for a raise. Typically during the period prior to the funding event, the company is tight with money. But while the executives exhale after getting their funding, you should be asking for a raise for your dedication and strong performance which contributed to the successful funding event.

Leverage

21. You have a new job offer

We saved the best for last. If you were looking for another job and received an offer, congratulations! But what if you would rather stay at your current job than move? Use that offer as leverage to get a raise. Even if the offer is for the SAME OR LESS money as you make now, it’s expensive for the company to replace you. What do you have to lose by asking for the raise? You already have a new job if your company doesn’t want to pony up.

There you have it! 21 situations when you must ask for a raise. Don’t forget these when they happen and you can reliably expect more money.

Here’s What To Do Next…

Get your checklist of 21 Never Forget Situations When You Must Ask For A Raise, plus 2 BONUS SITUATIONS not found in this post! Keep this checklist close by in case any of these situations arise. Click on the image below to download the checklist.

Originally posted on LinkedIn 9/5/2014. Check out the social impact of the post and keep reading to learn more.

“These aren’t the droids you’re looking for.” You can see Obi Wan now, can’t you? Waving his hand, directing the weak-minded stormtrooper to allow he and his fugitive companions to “move along.” Corporate recruiters and hiring managers have their version of this. Once you get hired, you undoubtedly hear some variant of the following: “You have one of the highest salaries on your team. Don’t tell ANYONE how much you make.” They may have even waved their hand around right in front of you.

But is it true? What incentive do the corporate recruiter and your manager have to tell you anything different? How would you even know if you’re not to discuss salary with colleagues?

Well, it just may be that you’re one of the highest paid people on your team. You may be the most qualified, have the most potential and the most experience in the area needed. It certainly strokes your ego to hear that you’re so well paid and valued so highly that even the rumor of your salary would spark envy among your teammates. In this way, you’re on the company’s side. Your interest is their interest.

Let’s be clear. This is nothing more than a manipulation tactic meant to keep salaries low. That’s the mind trick. Appeal to your ego so that you keep the lack of pay equity quiet. I admit it. It worked on me early in my career—until the time I found out that people brought into the company a level below me (and with less experience) were paid more than I was.

The conversation came up by chance in a group, but salaries were revealed. I immediately brought this revelation to my manager’s attention and, to her credit, she took on the challenge to fix the problem. After less than a month, the company made a salary correction for everyone at my level in the same situation. Total cost of the raises, you ask? Only $26,000. The ten of us who benefitted then became much happier and worked harder. That’s right. Pay equity brought better productivity and higher morale—and not one person left the company. If even ONE of us had left, it would’ve cost the company at least that much to replace that person.

Without [pay transparency], people can’t make meaningful career decisions and contest illegal and dysfunctional practices by companies,” he said. In addition, he says, “organizations would have better results and more satisfied employees if what they pay is made public, because so much of the information out there is erroneous.”

With the ubiquity of social media and generational embrace of openness, people are willing to share even the most sensitive information as long as there’s tangible benefit. In this case, pay inequities, discriminatory policies, and other unfair pay practices can be corrected, which puts real money in people’s pockets. I’d call that tangible benefit.

The activism in this space has skyrocketed in recent years. We’ve all heard of “Equal Pay Day”, the date on which women would receive the same pay as men had made the previous year if there were pay equity among genders (this year it was April 7). President Obama has signed multiple Executive Orders encouraging open discussions of salaries even beyond the rules in the National Labor Relations Actthat make it illegal for companies to retaliate against employees who share salaries. The message: don’t be afraid to discuss salary among co-workers.

Avoid the creepy factor in prompting these salary conversations, of course, and you will get the answers you need. If you uncover a pay injustice, work to get it resolved quickly. And keep a positive attitude. This is not the time to blast Fight the Power in the break room. Successful resolution will boost morale on the team followed by productivity and retention. Your manager may not want the short-term headache, but show her that your team is worth the effort. When productivity and morale increase, everyone wins.

David Solomon is Founder and CEO of SpringRaise, a salary consultancy and technology firm based in Los Angeles specializing in getting clients extraordinary raises above initial offers. SpringRaise maximizes salary for clients through patent-pending personalized reports that assess the quality of job offers as well as compare salaries to peers. David is also author of the highly successful salary negotiation guide, SpringRaise Your Salary: How to “Spring” Your Salary to Change Your Life. David earned his BS in Economics from The Wharton School at Penn and his MBA in Digital Strategy from UCLA. He sits on multiple boards and is a Henry Crown Leadership Fellow at The Aspen Institute.

Two trends have dominated the national conversation this year when it comes to employment policy: income inequality and pay equity. The two concepts are slightly different, but related. Income inequality measures the impact current policies have on the distribution of wealth and income between groups like whites and blacks. Pay equity is just one policy that may contribute to income inequality because of potential discriminatory pay practices.

Disparity in these two areas divide the country like never before in US history. Without opportunity, America isn’t America.

A Senior Legal Director from the Los Angeles-Long Beach-Glendale, CA area just found out they’re Well Paid vs. peers.

Data from 23,780 Lawyers was used to compare their salaries.

What This Lawyer Learned from the CompareMe Report:
“What this means is that among your peer group, you’re paid more than the average. This usually indicates you have more seniority and could be approaching another career milestone in the next couple years.”

Your personalized CompareMe Report will answer two questions for you:
1. How well paid am I versus my peers in my geography?
2. How much money should I ask for in my salary negotiation?

Armed with the answers to these questions, you’ll be prepared for your negotiation, no matter what the circumstance—raise at your current job, salary for promotion, or changing jobs. We will also provide recommendations for you on how to proceed given your data and position. It’s better to make your decisions with a sense of all alternatives before going into the negotiation.

A Director of Editorial from the New York-White Plains, NY area just found out they’re Very Underpaid vs. peers.

Data from 17,610 Editors was used to compare their salaries.

What the Client Learned:
“What this means is that you have surpassed the earning range for the previous level of pay and responsibility and are at the lowest level versus your current peers. This usually means you are new in your position or are ready for advancement and increased responsibility. If neither is the case, it’s likely that you are very underpaid versus your peers and should seek a raise.”

Your personalized CompareMe report will answer two questions for you:
1. How well paid am I versus my peers in my geography?
2. How much money should I ask for in my salary negotiation?

Armed with the answers to these questions, you’ll be prepared for your negotiation, no matter what the circumstance—raise at your current job, salary for promotion, or changing jobs. We will also provide recommendations for you on how to proceed given your data and position. It’s better to make your decisions with a sense of all alternatives before going into the negotiation.

Have you ever been the unicorn? You know, the perfect job candidate—the one who exceeds the job qualifications and will undoubtedly bring the elusive and intangible heat factor to the position. Unicorns are, by definition, rare. When you are the unicorn, you gallop into the company knowing you’re the perfect fit.

But can we only be a unicorn once? Is it a once-in-a-career occurrence? What if there are positions for which we are perfect, but we just didn’t know about them? What about jobs that have many players at the same position, like sales reps, customer service agents, management consultants or software developers, can you still be a unicorn?

The answer to both questions is a resounding YES. We all have unique traits, but it goes deeper than that. A unicorn signifies the perfect alignment of talent, skills, need, presentation, and timing. With those factors, we can all be unicorns–and more than once. The trick is more dependent on matching the need than being incredibly rare.

Invest in your network

The secret to maximizing your chance at becoming a unicorn is treating your professional network like a financial investment. Invest time in your network to keep them abreast of your successes and expanded skill set. When you invest your money, it works for you through interest, dividends, and capital gains. Your network should work the same way. Maximize the probability of a high return by constantly optimizing your opportunity for your network to notify you of job openings that match your talents. Here’s why. The probability that a friend (or a friend of a friend) will know of that perfect open position and alert you to it increases. And because you’re supremely qualified, you get paid more than the original offer. That delta between the original expected offer salary and what you ultimately get paid as the unicorn is your RON; return on network. It’s your network economic profit. When the timing is right, that delta is maximized. It’s almost as if the job finds you.

Don’t confuse your unicorn situation with a simple referral. A referral for a friend to fill a role doesn’t result in incremental compensation deserving of a unicorn. The match has to be perfect. In essence, the job needs you—you don’t need the job.

Think of the converse. When you seek a job, your decision-making becomes more strained, and the likelihood that you’ll accept a position at or below market rate increases. Alternatively, when you’re the unicorn, you drive the terms. The employer needs to get you in the door because, well, you’re a unicorn. You get offered more up front because it’s (rightly) assumed you will be more productive in the role than anyone else. Your confidence walking in the door is high because you know you can perform. Everybody wins.

I’ve been the unicorn twice in my career, once as a management consultant and once as a startup executive. The jobs needed me and my compensation increases in both cases soared above 50%. These were pure high RON scenarios (RONs +20% above expected offer salary). My network was looking out for me and alerted me to the perfect opportunities. Anyone can have this happen—and multiple times throughout their careers.

Become the unicorn more than once in your career. Maximize your network. Ethically bribe friends with coffee to catch them up on your latest everything. You may not be open to job opportunities at the moment, but that makes it even better. When your network comes across that perfect position that needs you, they’ll find you. The best part is that each time, you’ll get paid more than if you went looking for the job yourself.

Over the past two weeks, it wasn’t what we read that caught our highest level of attention. Ali Velshi, former business anchor on CNN, now has a show on Al Jazeera America called Real Money and did a segment with Linda Barrington, CEO of the Institute on Compensation. Her groundbreaking insight: “Employees perform better when pay is open.” Drop the mic.

And following up that telecast Kristyn Martin wrote this article for Al Jazeera America: Growing trend of companies revealing salaries of every employee. A Cornell study is (figure shown above) mentioned in the article on how pay transparency positively impacts productivity.My tweet: Embrace it! Growing trend of companies revealing salaries of every employee via @AJAMhttp://alj.am/WRItgvf